Nissan wants its suppliers near plants

By Lindsay Chappell, Crain staff (AN)

Detroit, Michigan -- Burned by the strong Japanese yen and stressed out over natural disasters and fuel costs, Nissan North America Inc. has a new directive to suppliers: Get closer to Nissan's assembly plants.

The company wants 100 percent of its parts to come from "close by the plant," says Rebecca Vest, Nissan's recently appointed North American purchasing head.

"I've been through enough disasters to know that it's lovely to be able to drive over and pick up your parts," Vest said after addressing suppliers Tuesday at the seminars here.

But Vest, vice president in charge of purchasing for Nissan's five North American vehicle and engine plants in Tennessee, Mississippi and Mexico, said the directive is intentionally vague and flexible. For example, Nissan is content to have many of its suppliers in the Great Lakes region.

"We're going to look at the total delivered cost to determine your competitiveness," she said. "But generally speaking, a supplier in New York is going to have a tougher time being competitive supplying our plants in Mexico than a supplier who is on the ground in Mexico."

The company's biggest headaches are coming from suppliers outside North America.

"The yen is causing me angst every day," she said, as she invited suppliers to pitch Nissan on business. "But that's great news for you."

Nissan is on a localisation drive, trying to re-source parts now made in Japan. The Japanese yen has been trading high against the dollar, crimping Nissan's profit on US-made vehicles that use parts imported from Japan.

The company also is shifting new vehicles to North America and expects to build in North America 85 percent of the vehicles that it sells in North America, up from the current 69 percent.

From Automotive News (A Crain publication)